THE UK AUTOMOTIVE SECTOR SUSTAINABILITY REPORT

PRODUCTION , USE AND DISPOSAL

EIGHTH INDUSTRY REPORT

www.smmt.co.uk

CONTENTS

1.0 Signatories and the reporting 2.0 Executive summary 7 3.0 Life cycle overview 13 year 3

4.0 Vehicle production and 5.0 Vehicle use 23 6.0 Vehicle disposal 33 distribution 15

4.1 UK production and registration 16 5.1 Introduction 24 6.1 End of life vehicles 34

4.2 Economics and investment 17 5.2 CO2 25

4.3 Production inputs 18 5.3 Alternative fuels 28

4.4 Material outputs 19 5.4 Air quality 29

4.5 People and skills resource 20 5.5 Safety 32

4.6 Supply chain 22

7.0 Stakeholder engagement 37 8.0 Integrated approach 39 Appendices 44 References 47 Contact information 48

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1.0 Signatories and the reporting year

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1.0 Signatories and the reporting year

This is the eighth annual report produced by the SMMT on the sustainability of the automotive sector. Now is a very pertinent time to look at the ongoing sustainability of the UK vehicle industry.

2006 was a great year of change in the UK automotive sector. Plant closures in Coventry and model changes elsewhere affected production vol- umes. However a successful UK automotive sector is still extremely viable.

A rapidly evolving, environmentally focused industry needs to deliver all the elements of sustainability to ensure long-term viability. This report demonstrates the challenges we face in the UK of achieving this and is a reflection of the pressures of adapting procedures, methods, products and disposal of vehicles. We have success in some areas, but not in all.

I hope you enjoy the new report and we look forward to SMMT coverage of these issues in future years.

Christopher MacGowan

Chief Executive, SMMT

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Signatories to this report are: Brands:

Bentley Motors Bentley

BMW Group BMW, MINI

*Daimler Chrysler Mercedes Benz, Smart, Chrysler

Ford Motor Company Ford engines, Ford Transit Vans

GKN Driveline Limited GKN

Honda UK Manufacturing Limited Honda

IBC Vehicles Limited Vauxhall, Nissan and Renault Vans

Jaguar Cars Limited Jaguar

Land Rover Land Rover

LDV LDV Vans

Nissan Motor Manufacturing (UK) Limited and Nissan Nissan Technology Centre Group

*Perkins Engines Perkins

PSA Peugeot Citroën Automobiles UK Limited Peugeot, Citroen

Toyota (GB) plc and Toyota Motor Manufacturing UK Limited Toyota, Lexus

Vauxhall Motors Limited Vauxhall

Volvo Cars UK Limited Volvo

Volkswagen Group (UK) Limited Audi, SEAT, Skoda, Volkswagen Passenger Cars, Volkswagen Commercial Vehicles

* Not included in 2005 data. Perkins manufactures engines, Daimler Chrysler data represents UK sales, administration and logistics.

Number of signatories has changed as a result of referring to groups not brands in 2006. 5

Vehicle production Vehicle use Vehicle disposal

 Production and real investment decline in  Air quality improvements  Car “take back” schemes in place 2006  Plant closures and re-assignments  Vehicle safety improvements  Data collection systems to be reviewed

 Employment in manufacturing declines  CO2 product performance improves

 Overall environmental performance stable  Total car CO2 emissions fall, despite increases in vehicle numbers and distance driven  Waste disposal issues caused by regulatory change

Integrated approach

 Technology

 Removing barriers to change

 Carbon price

An approach to all three is required to reduce CO2 emissions from road transport.

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2.0 Executive summary

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2.0 Executive summary 2.1 Production and distribution

The following section outlines the updated commitments developed in response to changes in our business and responsibili- ties. Performance of the sector in relation to the updated commitments is highlighted at the front of each section. •Green implies progress, orange static or too early to quantify and red, concern.

2002 2003 2004 2005 2006 Number of signatories (AS) 24 22 20 20 *17

This year two additional signatories (Daimler Chrysler, Perkins) were included into our report. * Please note that number of signatories has changed as a result of referring to groups not brands in 2006.

2.1.1 Vehicle production and distribution

2002 2003 2004 2005 2006 CHANGE 2006 ON 2005 Production inputs REPRESENTATION Total combined energy use (gwh) (AS) 6,681 6,126 5,337 5,103 4,851 -252 Energy used per vehicle produced (MW/h/unit) (VMS) 4.0 2.8 2.5 2.3 2.5 0.2 Total combined water use (000m3) (AS) 9,108 8,404 7,037 7,127 6,779 -348 Water use per vehicle produced (M3/unit) (VMS) 5.6 3.4 3.4 3.2 3.3 0.1

SUMMARY In the context of the whole industry the overall energy and water use continue to fall. The closure of the Ryton plant and production changes else- where have contributed to the loss of production volume, causing an increase in the per vehicle figure.

COMMITMENT Control and reduce the environmental impact of company operations.

FUTURE More efficient use of the resources, trends dependant on manufacturing production levels.

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2.1.2 Material outputs

2002 2003 2004 2005 2006 CHANGE 2006 ON 2005 REPRESENTATION

Total combined CO2 equivalents (tonnes) (AS) 2,142,706 1,679,832 1,447,900 1,417,129 1,363,189 -53,940

CO2 equivalents per vehicle produced (tonnes/unit) (VMS) 1.2 0.7 0.7 0.6 0.7 0.1 Total combined emissions of VOCs (tonnes) (AS) 6,240 7,337 5,480 6,478 5,041 -1,437 VOC emissions per vehicle produced (kg/unit) (VMS) 4.2 4.10 3.50 3.50 2.9 -0.6 Total combined waste to landfill (tonnes) (AS) 70,897 56,743 52,842 44,910 39,862 -5,048 Waste to landfill per vehicle produced (kg/unit) (VMS) 40.5 17.90 19.80 14.50 17.00 2.5

SUMMARY The overall material output was considerably lower last year. A slight increase in CO2 and waste to landfill per vehicle related to production de- crease, as well as plant closure. Change in the definition of waste paint sludge increased waste to landfill.

COMMITMENT Improve our understanding of the impact of pre- and post- production logistics towards the environment.

FUTURE Increased use of renewables and green energy, alongside aiming to achieve zero by-products from manufacturing. Availability, classification and cost of waste outlets will impact capability to move toward zero waste. 2.1.3 Economics and investment

2002 2003 2004 2005 2006 CHANGE 2006 ON 2005 REPRESENTATION Automotive manufacturing sector turnover (£ billion) 43.1 46.00 46.20 47.60 48.50 0.9 Total number of cars and CVs produced (UK) (WI) (million) 1.82 1.84 1.86 1.80 1.65 -0.2 Total new car registrations (UK) (AC) (million) 2.56 2.58 2.57 2.44 2.34 -0.1 Signatories’ combined turnover (£ billion) (AS) 35.70 39.16 34.64 39.38 41.87 2.5 Total number of vehicles produced (AS) (million) 1.44 1.73 1.61 1.77 1.90 0.1 SUMMARY Further decline in production and registration. Linked with plant closures and increased interest rates, resulting in decline in demand. Changes in model development reduces output in 2006.

COMMITMENT Affirm economic growth, turnover and investment toward securing competitiveness in the global economy.

FUTURE Concern over future investments to sustain UK production levels.

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2.1.4 Employment and employees

2002 2003 2004 2005 2006 CHANGE 2006 ON 2005 REPRESENTATION Signatories' combined number of employees (AS) 89,455 87,625 76,327 72,337 75,789 3,452 Signatories' lost-time incidents (AS) 648 710 491 410 385 -25 Signatories' average number of training days (AS) 4.2 3.8 2.9 3.2 2.7 -0.5 Signatories' average staff turnover (%) (AS) 7.0 7.1 8.65 5.8 5.7 -0.1 SUMMARY Although the number of employees is up, this is due to inclusion of new signatories; like for like employment continues to fall.

COMMITMENT Add value to employment capital through development, skills and training. Improve the working environment, health and safety of employees.

FUTURE Cooperation with the government to ensure that a more skilled and satisfied workforce is in place.

2.2 Vehicle use

2002 2003 2004 2005 2006 CHANGE 2006 ON 2005 REPRESENTATION

Average new car CO2 emimissions (g/km) (AC) 174.2 172.1 171.4 169.4 167.2 -2.2

SUMMARY In recent years, successful introduction of more environmentally friendly models into the market resulted in lowering national CO2 emissions from new registrations. Decline in total CO2 emission from cars. Significant improvements in safety and air quality emissions.

COMMITMENT Improve fuel efficiency of new product design. Improve the safety of the product.

FUTURE Providing consumers with a wide choice of safer, cleaner and affordable vehicles complying with higher emission standards.

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2.3 End-of-life vehicles

COMMITMENT Provide facilities for consumers to reduce vehicles for disposal at the end of life. Design and make cars so that at least 95 per cent of the weight of materials used can be recovered at the end of life.

FUTURE To continue to design vehicles for recycling, to research recyclability of lightweight and composite vehicles and components together with an in- crease of total recycling levels.

2.4 Sector fact sheet

2002 2003 2004 2005 2006 CHANGE 2006 ON 2005 REPRESENTATION Automotive manufacturing sector turnover (WI) (£ billion) 44.6 46.0 46.2 47.6 48.5 0.9 Total net capital investment (WI) (£ billion) 1.3 1.2 1.1 1.3 1.4 0.1 Value of exports (WI) (£ billion) 20.9 21.9 22.5 23.7 24.5 0.8 UK sector share of global passenger car production (%) 3.9 3.9 3.7 3.5 3.4 -0.1 Number of cars and CVs produced (million) 1.8 1.9 1.86 1.8 1.7 -0.1

SUMMARY Motor manufacturers maintain their leading role as value producers and exporters in the UK economy. Production and real investment declines.

FUTURE Industry relying on smaller number of plants strongly linked with export market.

Data in the report is quoted in a number of ways: Out of 25 key indicators

Whole industry data (WI) All car sales in the United Kingdom (AC) 16 green, progress SMMT members data (SMMT) 0 amber, static All signatories (AS) 9 red, concern Vehicle manufacturing signatories (VMS)

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2.4.1 Worldwide car production (‘000 units)

2006 CHANGE 2006 ON 2002 2003 2004 2005 2006 2005 - ranking REPRESENTATION Japan 8,619 8,478 8,720 9,017 9,757 1 740 Germany 5,123 5,145 5,192 5,350 5,399 2 49 China 1,091 2,019 2,316 3,931 5,233 3 1,302 USA 5,019 4,510 4,230 4,321 4,366 4 45 Korea Republic 2,651 2,768 3,123 3,357 3,489 5 132 France 3,283 3,220 3,227 3,113 2,728 6 -385 Brazil 1,520 1,505 1,863 2,010 2,092 7 82 Spain 2,267 2,399 2,403 2,098 2,079 8 -19 India 706 908 1,178 1,264 1,472 9 208 United Kingdom 1,630 1,658 1,647 1,596 1,442 10 -154 Total countries shown 31,909 32,610 33,899 36,057 38,057

Others 10,357 10,397 11,411 11,992 13,038

Grand total 42,266 43,007 45,310 48,049 51,095

SUMMARY During the last five years total production from the top ten manufacturing nations as at 2006, increased from 31,909,000 to 38,057,000 units. Pro- duction patterns have moved from Europe and North America to the Far East, East and South America.

FUTURE Growing production in the Far East and South America with increasingly competitive product portfolio, initially for home production, but developing export potential.

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3.0 Life cycle overview

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3.0 Life cycle overview

Evaluating the environmental attributes of a product requires looking at all stages of a product's life cycle. Observing the complete life cycle from production to use and disposal of a product helps obtain a clearer and more complete picture of the product's environmental attributes.

We have identified the emission of CO2 and projected implications for the life cycle of a car. Other vehicle types and other emissions will have a dif- ferent cycle overview. We are able to illustrate the relative importance of the use phase on CO2 emissions from cars.

This is a CO2 overview, other sustainability indicators, safety, air quality and noise will demonstrate different values throughout the life cycle.

.(1) (2) (3) The breakdown of CO2 life cycle emissions here is based on our own data and a range of academic reports

Production and distribution: Use phase: Disposal:

• Production • CO2 from distance driven • CO2 from end-of-life (ELV) operations • Logistics • CO2 from servicing and after market • Energy for sales and support functions functions * Note; if scrap is used in remanufacturing this item can become negative since scrap often saves energy over the use of virgin materials.

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4.0 Vehicle production and distribution

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4.0 Vehicle production and distribution 4.1 UK production and registration

2,000,000 3,000,000

1,800,000 2,500,000 1,600,000

1,400,000 2,000,000 1,200,000

1,000,000 1,500,000 Units 800,000 1,000,000 600,000

400,000 500,000 200,000

0 0 1999 2000 2001 2002 2003 2004 2005 2006 1999 2000 2001 2002 2003 2004 2005 2006

Cars produced CV produced Cars exported CV exported Cars registered CV registered

Source: SMMT Source: SMMT

Production Production fell in 2006, primarily due to the closure at Peugeot Ryton and model changeovers. Ryton will not be replaced, so UK production is reli- ant on increase from current plants. These plants are highly export dependent (76.7 per cent), highlighting the need to ensure free, equitable trade is retained.

Registration After four years of high levels of car registrations, there was a decline in 2006. Private buyer confidence may account for the decline in market ac- tivity, but the loss of 95,000 units is significant. Commercial vehicle registrations increased in 2006, a sign of buoyant economic activity. The intro- duction of new emissions regulations created a market distortion in the commercial sector.

Export The level of exported cars and CVs has a direct bearing on production volume. Despite a decline in car production, the UK is still one of the major players in the European market.

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4.2 Economics and investment

Table 4.2.1 1999 2000 2001 2002 2003 2004 2005 2006

Auto manufacturing sector net capital (£ billion) 2.2 2.2 2.2 1.3 1.2 1.4 1.3 1.4

Inwardinvestment direct investment into automotive (£ billion) 3.3 2.6 -0.9 -4.4 -3.3 -0.7 0.6 0.3 manufacturing Investment in the sector continues to decline in real terms. This is of concern for the long-term sustainability of the automotive sector in the UK. In a global investment scenario, although remaining a significant market and exporter, the UK is not maintaining its profile of investment.

Support for investment through coordinated work by the Department for Transport and BERR (formally DTI) will be required to develop new tech- nologies and reverse this trend.

3.5 Economics and investment

BUSINESS AND FINANCE COMMUNITY Investment in new technology is critical to ensure future sustainable transport. Transport, however, is a complicated balance of supply of new innovative products and demand for these products. Stern (October VALLEY OF DEATH 2006) recognised this in his market transformation model. Supply, tech- INVESTMENT nology push and demand, and market pull, are all required to transform (4) MARKET PULL the marketplace. RESEARCH

Many new technologies fail to achieve commercial production volumes after research and testing. This is the so-called “valley of death” to commercialisation and sale in significant volumes.

TECHNOLOGY PUSH CONSUMERS Overcoming the “valley of death”, the bridge between new technology supply and roll up demand, is critical to the success of sustainable POLICY INTERVENTION transport. To take new products from research to popular consumer de- mand, support from government and business finance is needed throughout the process.

GOVERNMENT

Source: Stern Report Source: SMMT 17

4.3 Production inputs

4.3.1 Energy consumption 4.3.2 Water use

7,000 4,500 10,000 6

4,000 9,000 6,000 5 3,500 8,000 5,000 7,000 3,000 4 6,000 4,000 2,500 5,000 3 2,000 3,000 4,000 2 1,500 3,000 2,000 m3 per vehicle (line) kwhpervehicle (line) Totalenergy use (GWh) 2,000 1,000 (000m3) use Combined water 1 1,000 1,000 500 0 0 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006

total energy use GWh (AS) Total energy use (VM) kWh per vehicle (VM) Total Water Use (AS) Total water use (VM) m3 per vehicle produced (VM)

Total energy use - all signatories (AS) Total water use – all signatories (AS) Total energy use fell in absolute terms, by five per cent, despite the Total water use was much lower in 2006 across the sector, falling by addition of Perkins and Daimler Chrysler’s field-based operations to five per cent. the data. Two signatories now use renewable power generators on site.

Energy use – vehicle manufacturers (VM) Water use - vehicle manufacturers (VM) Energy use for all vehicle manufacturers remained about the same in Less water used in 2006 when compared to 2005. 2006.

Energy use per vehicle (VM) Water use per vehicle (VM) This indicator rose in 2006 by nine per cent. Decline in production lev- Last year we can observe a slight increase in water use per vehicle. els associated with the closure of Peugeot Ryton and model changes This is as a result of the decline in production levels. led to reduced production values and this led to a relative increase in energy use per vehicle.

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4.4 Material outputs

4.4.1 CO emissions from production and distribution 4.4.2 Volatile organic compound (VOC) emissions 2

2,500,000 1.4 8,000,000 4.5

1.2 7,000,000 4 2,000,000 6,000,000 3.5 1 3 5,000,000 1,500,000 0.8 2.5 4,000,000 2 0.6 3,000,000 1,000,000 1.5

VOC emissions (kg) emissions VOC 2,000,000 1 kg per vehicle (line)

CO2 equivalent (tonnes) (tonnes) equivalent CO2 0.4

500,000 1,000,000 0.5 0.2 (tonnes) vehicle per equivalent CO2 0 0 2002 2003 2004 2005 2006 0 0 2002 2003 2004 2005 2006 Total emission of VOC (kg) (AS) Total VOC emission (kg) (VM) Total CO2 equivalent (tonnes) (AS) Total CO2 equivalent (VM) Emissions of VOC (kg) per vehicle produced CO2 equivalent (tonnes) per vehicle produced (VM)

Total CO2 emissions - all signatories (AS) Total VOC use - all signatories (AS) In 2006 CO2 emissions from manufacturing, distribution and sales After increasing in 2005, total VOC value significantly declined in 2006, declined in absolute terms, despite two additional signatories. by 22 per cent.

Total CO2 use - vehicle manufacturers (VM) Total VOC use - vehicle manufacturers (VM) There was a slight decrease in overall CO2 emissions from UK vehicle VOC emissions dropped down to the lowest value recorded to date. manufacturers’ production.

CO2 emissions per vehicle produced Emission of VOC per vehicle produced There was an increase in CO2 emissions per vehicle by 0.1 tonnes in After stability in 2005, emissions of VOCs declined significantly by 17 comparison with 2005. This fact is strongly connected with the lower per cent from 3.5 kg per vehicle in 2005, to 2.9 kg per vehicle in number of vehicles produced in 2006. 2006. This is consistent with continuing investment in paint shop facili- ties in the industry.

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4.4.3 Waste to landfill 4.5 People and skills resource

4.5.1 Employment 80,000 45

40 70,000 35 60,000 2006 saw a further decline in employment in manufacturing and for sig- 30 natories (excluding Perkins and Daimler Chrysler, who are not included 50,000 in last year’s data). 25 40,000 20 In 2006 we started to analyse employment by signatories. Of 75,000 30,000 employees we would estimate 70 per cent are directly manufacturing re- 15 lated. The remaining are functions such as sales and marketing, 20,000 10 kg per vehicle (line) finance and logistics. Waste to landfillWaste (tonnes)

10,000 5 Declining employment levels remain a concern for the UK as a manufac- 0 0 turing base. 2002 2003 2004 2005 2006

Total Waste to landfill (tonnes) (AS) Total waste to landfill (tonnes) (VM) Waste to landfill (kg) per vehicle produced (VM)

Total waste to landfill - all signatories (AS) 1,000,000

Declined slightly in 2006. The closure of Peugeot Ryton generated 800,000 demolition waste which affected this figure.

Total waste to landfill - vehicle manufacturers (VM) 600,000

Increased slightly by five per cent in 2006 to 25,930 tonnes from Jobs 24,654 tonnes in 2005. 400,000

Waste to landfill per vehicle produced 200,000

Increased by 2.5 kg per vehicle equivalent. This was due to statutory changes in the definition of waste (paint sludge) and the reduced 0 availability to utilise other materials in cement production, which 1999 2000 2001 2002 2003 2004 2005 2006 then went for disposal. (5) All Jobs Manufacturing Supply and use Signatories (AS)

Source: SMMT

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4.5.2 Training Health and Safety 4.5.3 Health and safety

300,000 € 4.00 800 250

€ 3.50 700 250,000 200 € 3.00 600

200,000 500 € 2.50 150

400 150,000 € 2.00 100 300 € 1.50 100,000 200 50

Numberdaystrainingof € 1.00 Numberincidents time lostof Lost-timeincidents perperson Trainingdays peremployee 100 50,000 € 0.50 0 0 2002 2003 2004 2005 2006 0 € 0.00 2003 2004 2005 2006 Total of lost-time incidents Lost-time incidents per person

Total of training days Training days per employee Training by the signatories is about three days per employee per year, Health and Safety incidents continue to make further reduction and indicating an investment of about 225,000 days per annum. Actual days has declined by 300 incidents since 2002. declined slightly in 2006 from 3.2 to 2.7. Reduced investment in training is of concern. This has been helped by establishing a best practice working group, sharing the benefits of best safety procedures amongst manufacturers. Training links directly to the skills base and it is encouraging to see the development of a higher skills base in the sector. We are concerned that However as employee numbers decline, ratio per employee has in- skills shortages may become a barrier to further development of the sec- creased. tor.

Many automotive manufacturers promote improvements in education, training and learning.

A prime example of this tendency is one of our signatories which brought in many new training initiatives during 2006. Training programme for employees covering: basic skills, NVQ attainment in Business Techniques, educational assistance, technical skills and work culture.

One member organisation reported that during 2006, approximately 280 employees completed an NVQ2 Qualification in Business Improvement Techniques and five employees achieved level three in the same qualification. Additionally, 36 employees achieved a National Numeracy and Liter- acy Certificate and 13 employees successfully completed a further or higher educational programme; another 80 enrolled onto a programme.

In stamping and tooling operations: Employees participated in a programme developed by the Automotive Academy and funded by the Learn- ing Skills Council for employees to complete NVQ2 in Business Improvement Techniques.

Thirty production operators achieved NVQ2 in Performing Manufacturing Operations. Several employees completed BEng in Manufacturing Engi- neering Systems at Swansea Institute and one employee completed Open University degree in engineering which is sponsored by the company.

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4.5.4 Staff turnover 4.6 Supply chain

10.0

9.0 “Carbon footprint” is a term increasingly used to identify the climate

8.0 change impact of a product or service. We estimate that just ten per

7.0 cent of the life cycle CO2 emissions are generated through the manufac-

6.0 turing process, including the supply chain.

5.0

4.0 We have yet to establish the supply chain element of the process.

3.0 However, signatories continue to make effort to reduce the climate Staff turnover (per cent) (per turnover Staff change impact of this activity. 2.0

1.0 Some examples are illustrated below. 0.0 2003 2004 2005 2006

Staff turnover

An annual 5.7 per cent staff turnover is extremely low. Many other sec- tors’ turnover is double this and in some sectors it is not uncommon to Examples of carbon reduction in the supply chain: have staff turnover figures in excess of 30 per cent.

Even though 2006 saw the closure of the Peugeot Ryton plant, the  A new milk round system introduced with 48 of their suppliers figures demonstrate this member’s commitment to find future and another 20 to be introduced in 2007 to reduce vehicle employment for Ryton staff. movement and maximise vehicle load.  A manufacturing strategy was introduced - 60 per cent of parts A Resource Centre was created with more than 6,000 alternative job to be sourced in the continent of manufacture/consumption opportunities available to the 2,050 employees concerned. Nine job fairs therefore less ocean freight. were organised on site, with the involvement and support of many other  UK VMI (Vendor Managed Inventory) Hub agreement in place - organisations and employers. plan to consolidate overseas shipment in UK.  Revised supplier routes and reduced mileage by 2,000 miles per As a result of the success of the support arrangements put in place to week, equating to 760 litres of fuel per week. help employees, the closure date was brought forward from the planned  Reviewed aerodynamics of freights/logistics vehicles to improve date. Many employees found alternative employment or sought to leave fuel efficiency and reduce the carbon footprint. in order to pursue personal plans. The other employees were supported with information on setting up a business, retraining, redeployment  Vehicles taken out of service to improve vehicle utilisation. within the Group or early retirement.  All drivers sent on a defensive and economic driver training course to improve efficiency. As a result of the support of the manufacturing division, its management  Undertook trials using different tyres to improve vehicle efficiency and employees, this closure programme was concluded without a single and increase the number of miles per gallon.

day of industrial action and with the achievement of all quality, safety and volume objectives.

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5.0 Vehicle use

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5.0 Vehicle use 5.1 Introduction 5.1.1 Comparative data

Vehicle usage, or miles driven and their impact, is covered in this sec- As in previous years, we will analyse the five best-selling model ranges in tion. As in other sections we focus on the fundamental issues: each segment and compare these with performance by those models in  CO2 2000, the first major year of our reporting.  Air quality  Safety This comparison highlights the progress toward cost-effective, sustain- able transport; making cars cleaner, safer and reducing CO2. This is We acknowledge other use impacts such as noise, but primarily focus on something other sectors and other transport modes should also demon- the above three elements. strate in a clear comparative way.

The use phase of the vehicle has the highest environmental impact, therefore ensuring the use impact is managed is seen as a priority by the vehicle manufacturers. Engine and vehicle technology are all developed to support this agenda. Segment Best seller 2006 We should recognise that it is not always possible to develop a strategy to improve CO2, air quality and safety at the same time, or at the same Supermini Ford Fiesta rate, in a cost-effective way. Air quality and safety regulation can conflict with CO2 reduction strategy, by adding weight and requiring advanced powertrain technology for air quality. Lower medium Ford Focus

Please see the SMMT website: Upper medium BMW 3 Series

“The evolution of the car” MPV Vauxhall Zafira FORD FIESTA

1996 2007 Dual purpose Honda CR-V

Source: SMMT 24

5.2 CO2

5.2.1 Sources of CO2 5.2.2 Tailpipe CO2 emissions

Total road transport CO2 emissions are a function of more than just ve- hicle technology. The number of vehicles and the distance driven will 20.1% impact total CO value. This calls for an integrated approach to address 35.0% 2 total transport CO2.

The graph below shows that total emissions for cars declined despite 14.0% more cars in use and greater distance travelled. This is a reflection of 6.3% the increased efficiency of cars. 24.6%

Energy Road transport UK CARS Domestic use Aviation, including international Industry, agriculture and other 120

Source: NAEI. DEFRA 115

110 In the UK one in every five tonnes of CO2 emitted in 2006 was from road transport, of which, cars contributed just one in every eight ton- 105 nes. In recent years, growth in CO2 emissions has been generated from the commercial, light and heavy goods sectors. Per cent 100

97 98 99 00 01 02 03 04 05 This increase in CO emissions from commercial vehicles has been ac- 2 95 companied by strong economic growth, a rise in the transport of fin- ished or semi-finished goods, as opposed to raw materials, and a 90 growth in deliveries to customers products and services.

Parc km travelled CO2 emissions

Source: SMMT

The Department for Transport is to invest £10m into the Act on CO2 campaign. It aims to raise the awareness of the contribu- tion each person can make to reduce climate change. It facilitates the means to make an informed decision while buying and driving a car in the context of a personal carbon footprint.

www.dft.gov.uk/actonCO2

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5.2.3 New car tailpipe CO2 grams per kilometre 5.2.4 New car tailpipe CO2 by VED band

195.0 100.0 189.9 190.0 188.4 90.0

185.0 80.0 185.0 70.0 G 181.0 F 180.0 177.7 60.0 E 50.0 D 174.2 175.0 C 172.1 40.0 171.4 B 169.4 170.0 30.0 A CO2 emissionsg/km CO2 167.2 Marketshare (per cent) 20.0 165.0 10.0

160.0 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 155.0 Years 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: SMMT Source: SMMT

Average new car CO2 fell to 167.2 g/km in the UK in 2006. New product The SMMT has been monitoring new car CO2 since 1997. The graph availability in the Supermini segment and an increase in the rate of re- above illustrates the change in the new car fleet up to 2006. duction in new car CO2 for private buyers are a positive trend. To further achieve average new car emission reductions, more cars will SMMT forecast strong development of new, lower carbon technologies need to be developed and sold in the “A” and “B” bands, currently such as “stop start”, regenerative braking, and enhanced electrical sys- around five per cent of sales. tems, which will become more widely available. As well as reducing re- ported data these technologies can enhance real world driving econ- The new “G” band (newly introduced in 2006) accounts for just over omy. seven per cent of sales. We have apportioned “G” band for previous years.

Fuel Economy

CO2 emission figure (g/km) < 100 A A g/km 101 – 120 B 121 – 150 C 151 – 165 D The voluntary colour-coded label turned out to be a success, providing customers with a full view of the vehicles' run- 166 – 185 ……… E

186 – 225 F

226 + G ning costs and environmental implications.

Fuel cost (estimated) for 12,000 miles A fuel cost figure indicates to the consumer a guide fuel price for comparison purposes. This figure is calculated by using the combined drive cycle (town centre and motorway) and average fuel price. Re-calculated annually, the current cost per litre is as follows - petrol 80p, diesel 84p and LPG 39p (VCA May 2005)

VED for 12 months Vehicle excise duty (VED) or road tax varies according to the CO2 emissions and fuel type of the vehicle.

Environmental Information

A guide on fuel economy and CO2 emissions which contains data for all new passenger car models is available at any point of sale free of charge. In addition to the fuel efficiency of a car, driving behaviour A survey conducted by LowCVP regarding label compliance (across all dealerships selling new cars) shows a significant as well as other non-technical factors play a role in determining a car’s fuel consumption and CO2 emissions. CO2 is the main greenhouse gas responsible for global warming

Make/Model: Engine Capacity (cc):

. improvement. Recent data show 86 per cent of dealerships displaying the label compared with 65 per cent in year

Fuel Type: Transmission: Fuel Consumption: (6)

Drive cycle Litres/100km Mpg 2005. Urban

Extra-urban

Combined

Carbon dioxide emissions (g/km):

Important note: Some specifications of this make/model may have lower CO2 emissions than this. Check with your dealer.

Source: SMMT 26

5.2.5 Uptake of diesel

45.0 80

70 40.0 38.3% 36.8% 60

35.0 32.5% 50

40 30.0 27.3% 30 25.0 23.5% 20

20.0 17.8% 10 Diesel penetration (per cent) penetration(per Diesel 14.1% 15.0 13.8% 0 Diesel penetration (per cent) (per Diesel penetration 10.0 A- Mini I-MPV F- Luxury G-Sports B-Supermini E-Executive 5.0 C-Lower mediumD-Upper medium H- Dual purpose Segments 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2005 2006

Source: SMMT

In the last six years there has been a significant increase in the diesel penetration of new cars sold in the UK, from 14.1 per cent in 2000 to 38.3 per cent in 2006. This uptake of new clean diesel technology has predominantly been in the large car sector. Diesel penetration in smaller, lower mileage cars remains low, the price of diesel is making the economics of selection an issue.

Table 5.2.5 Best-selling models - CO2 2000 2006 % down In the last few years, CO from best-selling models has been re- . 2 Supermini Ford Fiesta - diesel 136 Ford Fiesta - diesel 116 -14.7 duced by up to 24 per cent. This is largely as a result of improved Lower medium Ford Focus - diesel 142 Ford Focus - diesel 124 -12.7 direct injection diesel technology. Upper medium BMW 3 Series - diesel 152 BMW 3 Series 150 -1.3 MPV Vauxhall Zafira - diesel 177 Vauxhall Zafira - diesel 162 -8.5 The introduction of more environmentally friendly models to the 4x4 Honda CRV - petrol 229 Honda CRV- diesel 173 -24.5 market and their popularity amongst buyers, resulted in a further cut of 2.2 g/km in new car CO2 emissions in 2006.

* BMW 3 Series -diesel- 123 g/km CO2 available from September 2007 Source: VCA www.vcacarfueldata.org.uk Since 1997, on average, there has been a cut of at least 2.5 g/km per year per new vehicle.

27

5.3 Alternative fuels

5.3.1 Sales of alternative fuelled vehicles 5.3.2 Biofuels and flex fuel vehicles

Sustainable biofuels have an important role in the UK and Europe for 10,000 meeting their commitments for CO2 emission reduction, through an in- 9,000 tegrated approach. 8,000 Petrol/alcohol

7,000 Electric only Biofuels can be used in their pure form, or more typically as a blend 6,000 Petrol/electric with petrol and diesel (typically less than five per cent). The main fuel 5,000 hybrid Petrol/gas types are biodiesel, bioethanol and biogas. 4,000

3,000

Sales of new vehicles new of Sales The Renewable Transport Fuel Obligation (RTFO) Programme will, from 2,000 April 2008, place an obligation on fuel suppliers to ensure that a certain 1,000 percentage of their aggregate sales is made up of biofuel. 0 2000 2001 2002 2003 2004 2005 2006 The effect of this will be to require 5 per cent of all UK fuel sold in the Years UK to come from a renewable source by 2010. Source: SMMT The RTFO is modelled on the existing Renewables Obligation in the UK electricity supply industry and expects to reduce carbon emission from During the last six years there has been a significant increase and road transport in 2010 by about 1 million tonnes. (7) change in the nature of sales of alternative fuel cars.

New cars are no longer supplied with LPG fuel option, sales declined as Number of alternative fuel pumps a result of a change in duty differential and withdrawal of subsidy, illus- trating the need for more consistent legislation to effect market trans- 14 1 formation. 18

Sales of hybrid vehicles have increased through greater model availabil- 20 ity.

During 2006 sales of flex fuel (cars capable of running on blends of ethanol up to 85 per cent) started and SMMT recorded the sales of elec- 148 tric cars and Quadra cycles. However, with sales of just 9,439 this represents just 0.4 per cent of the UK market.

Biodiesel stations (B10) Electricity recharging points Natural gas stations Bioethanol stations (E85) Hydrogen stations closed in 2006

Source: Energy Saving Trust 28

5.4 Air quality

5.4.1 NOx emissions 5.4.2 PM10 emissions

800 35 700 30 600 25 500 20 400 300 15 200 10 kilotonnes/yr -1 kilotonnes/yr -1 100 5 0 0 2002 2005 2010 2015 2020 2002 2005 2010 2015 2020

Road Energy Industry Domestic Off road Quarrying Industry Production Domestic Road Agriculture Road Dust

Source: Netcen Source: Netcen

Since the 1970s, the amount of polluting elements in tailpipe emissions has decreased radically. Diesel engines now emit 95 per cent less nitrogen oxide (NOx) and PM10 than was the case 25 years ago. Exhaust emissions from trucks have fallen by 40 per cent since the mid 1990s, although the number of kilometres driven has risen 4 per cent.

Since 1992, the process has involved the introduction of a number of "Euro" standards, involving the introduction of the catalyst converter, particu- late matter filters and other measures. The Clean Air For Europe Programme (CAFÉ) predicts a more than 90 per cent reduction in NOx by 2020, even without Euro 5 coming into force (foreseen for 2009). An important environmental challenge is now keeping cars affordable and replacing old vehicles with new ones. (8)

Low Emissions Zones (LEZ)

From 4 February 2008 the first Low Emission Zone will be in operation. The LEZ covers most of Greater London following the Greater London Authority boundary. The vehicles affected are older diesel-engined trucks, coaches, buses, large vans, minibuses and other specialised vehicles that are derived from trucks and vans such as motor caravans and motorised horse boxes. The emissions standards for the Low Emission Zone (LEZ) are based on Euro standards which vehicles must comply with when manufactured. Vehicles that do not meet the specified emissions standards can be used within the Zone, but operators will be subject to a substantial daily charge. However, the greatest improvement in road transport derived air quality in London will come from progressive vehicle technology. www.tfl.gov.uk/roadusers/lez

29

EURO 5 & 6 (cars), EURO V & VI (trucks)

NOx and PM standards for petrol cars NOx and PM standards for diesel cars

0.8 0.8

0.7 0.7

0.6 0.6

0.5 0.5

0.4 0.4

NOx (g/km) NOx 0.3 (g/km) NOx 0.3

0.2 0.2

0.1 0.1

0 0 1992 EURO1 1996- EURO 2 2000- EURO 3 2005- EURO 4 2009- EURO 5 1992- EURO 1 1996- EURO 2 2000- EURO 3 2005- EURO 4 2009- EURO 5

NOX PM NOX PM

Source: SMMT Source: SMMT The emission standard currently for light-duty vehicles, is Euro 4. Euro 5 and Euro 6 standards have already been agreed by Council and Parlia- ment.

Euro 5 will enter into force in September 2010 for all cars. Euro 5 will reduce the emission of particulate matter from diesel cars from 25 mg/km to 5 mg/km. Euro 6 is scheduled to enter into force in January 2014 and will reduce the emissions of NOx from diesel cars further, from 180mg/km to 80 mg/km.

The current legislation for heavy-duty vehicles defines the emission standard currently in force, EURO IV, as well as the next stage (EURO V) which will enter into force in October 2008. (8)

‘This Government has consistently encouraged the use of cleaner fuels, technologies and vehicles, for example through graduated vehicle excise duty, the reformed company car tax structure and fuel duty differentials. The Government announced in Budget 2007 that it would consider the case for incentivising the early uptake of Euro 5 and subsequently Euro 6 technology through Company Car Tax and other instruments. An incen- tive for Euro 6 take up cannot be provided until Euro 5 is mandatory.

Incentivising the earlier up-take of cleaner diesel vehicles at the Euro 5 and 6 levels could improve greenhouse gas emissions and also help to real- ise the co-benefits from air quality and climate change policies as discussed by Stern. The modelling of this measure estimates likely benefits to the UK net of the associated costs in the region of £246 to £595m per annum, although a full impact assessment of the implementation options is yet to be undertaken.’ (9)

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5.4.3 Vehicle air quality emissions

Table 5.4.3 Best-selling models - lowest CO 2 CO2 PM 10 NOx HC and NOx CO The table, based on VCA data, illustrates 2000 values further improvement in air quality and CO2 comparison with year 2000 values. Ford Fiesta - diesel 144 0.049 0.454 0.48 0.157 The challenge of improving CO2 and air Ford Focus - diesel 142 0.036 0.489 0.727 0.526 quality emissions from vehicles is a real BMW 3 Series - diesel 152 0.035 0.411 0.46 0.245 one. Engineering resources, costs and time- frame all need higher investment from vehi- Vauxhall Zafira - diesel 177 0.044 ND 0.574 0.591 cle manufacturers.

Honda CR-V - petrol 229 ND 0.444 ND 0.957 Product development cycles dictate oppor- tunities to improve performance. Powertrain development cycles are in excess of ten 2006 values years.

Ford Fiesta - diesel 116 0.02 0.192 0.207 0.173

Ford Focus - diesel 124 0.019 0.205 0.221 0.178 Vehicle Excise Duty was one of the instru- ments used to move toward lower carbon BMW 3 Series - diesel 150 0.02 0.202 0.224 0.08 transport.

Vauxhall Zafira - diesel 162 0.001 0.198 0.224 0.21 The Government reformed Vehicle Excise Honda CR-V - diesel 173 0.023 0.137 0.155 0.116 Duty in 2001 to move to a carbon dioxide- based graduated system.

In 2006, further reforms were announced Percentage change by the government to introduce further Ford Fiesta -19.44 -59.18 -57.71 -56.88 10.19 benefits to encourage uptake of the fuel- efficient cars. Ford Focus -12.68 -47.22 -58.08 -69.60 -66.16 A new higher band of VED (Band G) has BMW 3 Series -1.32 -42.86 -50.85 -51.30 -67.35 been set at £210 for the most polluting new cars, while VED for the least CO Vauxhall Zafira -8.47 -97.73 N/A -60.98 -64.47 2 emitting vehicles has been reduced to £0 Honda CR-V -24.45 N/A -69.14 N/A -87.88 to aid the development of the low carbon vehicles market. Source: VCA www.vcacarfueldata.org.uk ND = No data 31

5.5 Safety

5.5.1 Product safety 5.5.2 Serious injuries and miles travelled

Euro NCAP provides useful guidelines on car safety across different Further decline in serious personal injuries can be noticed despite ranges. growing traffic levels.

The table below compares the NCAP rating for five top-selling cars in This fact could be linked to continuous technical advancements as well different market segments. It highlights a significant improvement as improvement in road infrastructure design. within passengers’ and pedestrians’ safety. Safety features focus not only on passengers’ safety but equally on These safety developments have been achieved despite the constant better front design to limit injury to pedestrians and cyclists. struggle to balance additional safety features and weight gain linked with CO2 emission.

Best-selling models - ncap Reference Reference safety year year 60,000 520 50,000 500 Ford Fiesta 1997 ND Ford Fiesta 2002 480 40,000 Ford Focus 1999 ND Ford Focus 2004 460 30,000 440 (bars) BMW 3 Series 1997 ND BMW 3 Series 2005 20,000 (line) kms 420 10,000 Vauxhall Zafira 2001 ND Vauxhall Zafira 2005 400 Thousandmillion vehicle

Personsserioulsy injured 0 380 Honda CR-V 2002 Honda CRV 2007 ND '- No Data 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 '- Passenger protection '- Pedestrian protection, changed to a more stringent test after 1 January 2002 Years www.euroncap.com Source: Euroncap Source: Department for Transport (10)

The popular supermini section of the Euro NCAP classification is the most challenging with re- gard to balancing weight and safety. The most recent additions to this class prove that a marriage BMW MINI 2007 between the two is possible and commercially successful.

Peugeot 2006 This type of information is sought by more and more people who are concerned by climate change issues, and safety, and who want to take advantage of growing tax incentives. Vauxhall Corsa 2006

32

6.0 Vehicle disposal

33

6.0 Vehicle disposal 6.1 End of life vehicles

6.1.1 The End-of-Life Vehicle (ELV) directive Administrative preliminary checks and (optional) check IDIS information on the make / model

Implementation of Directive 2000/53/EC in 2005 has impacted on the design and disposal phase of a vehicle by: Start of depollution process

1. Setting targets for reuse, recycling and recovery of materials from

vehicles. Disconnect battery and remove from vehicle Set heater control to maximum Remove fuel cap and oil filler cap 2. Setting environmental standards for vehicle dismantlers and scrap metal recyclers.

All the wheels and tyres removed from the vehicles 3. Requiring manufacturers to consider ELV in the design and manu- Remove lead balancing weight facture of vehicles, and to restrict the use of certain materials in vehicles, e.g. lead. Vehicles placed on support frames giving above and below access for fluids and gases removal 4. Introducing certificates of destruction (CoD) to capture disposal for fluids and gases removal through authorised treatment facilities.

FLUIDS OTHER ITEMS Debowse petrol/diesel using specialist equipment Remove catalyst(s) To address this, all manufacturers of cars and light vans have to demon- Drain engine/transmission oils Remove oil filter Drain anti-freeze and screen wash strate that they have systems in place to achieve recycling rates of 85 Degas air conditioning systems with specialist Drain suspension system (e.g. shock absorbers) fluids equipment into special canister per cent by weight. Plans are being developed by the European Commis- Drain brake fluid from brake lanes and master cylinder Drain power-assisted steering system sion to increase this to 95 per cent by 2015. Check for and remove any items marked hazardous (e.g. mercury switches) Note: all fluids to be stored in separate containers in bunded storage area prior to specialist recovery/disposal 6.1.2 Process and methods

Insert plugs in all drain holes To improve environmental standards, vehicles are now required to be depolluted. This is achieved by removing the battery, draining and col- Vehicles removed from draining frame lecting all fluids, removing the tyres, draining and collecting the air con- and placed on concrete pad ditioning gas, removing the oil filter and any known hazardous material, such as lead wheel weights. Deploy air bags at a set time delay after disconnecting of the battery, or remove for subsequent neutralisation Cars with air bags and seat belt pre-tensioners are increasingly arriving as ELVs and these must be deployed as part of the depollution process.

End of depollution procedure Source: Environment Agency 34

6.1.3 Vehicle design 6.1.4 Establishment of take back networks

In 2005, the Department for Trade and Industry (DTI) contracted the From January 2006, all manufacturers of cars and light vans have put Consortium for Automotive Recycling (CARE) to conduct a trial to de- in place a network of ATFs to receive and treat vehicles for recycling termine the metallic content of cars being scrapped. and recovery. The ATFs are spread across the UK to provide conven- ience for last owners who will be given a certificate of destruction The result was that 75 per cent of a car is metallic and a further 1 per (CoD) as proof of the vehicle’s de-registration, relieving them of any cent is fuel, all of which is currently recycled. Therefore, producers and obligations for continuous taxation of the car. The networks that have authorised treatment facilities (ATFs) need to reuse, recycle or recover been set up are managed by either of the two following organisations: an additional 9 per cent vehicle weight to meet the 85 per cent target set by the ELV regulations. • Autogreen www.autogreen.org

Some ATFs will remove components for resale or for specific material • Cartakeback www.cartakeback.com stream recycling. Ultimately, however, cars will end up at a shredder site where the car will be reduced to small pieces and then further separated into material streams for ongoing recycling or energy recov- ery.

Average car material breakdown of ELV car 2006

Glass 3%Battery 1% Tyres 3% Other 1% Rubber 2% Process polymers 1% Carpets/NVH 1%

Plastics 10%

Fluids 2% Electrical parts 1% Heavy non-ferrrous 2%

Light non-ferrous 6%

Ferrous metal 67%

Source: SMMT 35

6.1.5 Recycling/recovery performance 2006 32,000,000 15

31,000,000 14.5 2006 saw the introduction of the certificate of destruction (CoD) which 30,000,000 is issued on behalf of the DVLA when a vehicle is scrapped. Around 14 29,000,000 842,000 certificates were issued, about half of what was expected. The 28,000,000 DVLA also allows an alternative method of de-registering a vehicle and 13.5 the industry estimates that a further 500,000 vehicles took this 27,000,000 Average age at age scrappage Average method, bringing the total deregistration by scrapping closer to previ- Totals of cars UK on roads 13 ous years, when it was between 1.6 and 1.8 million. Industry is press- 26,000,000 ing the DVLA to enforce the CoD route as required by the Directive. 25,000,000 12.5 1999 2000 2001 2002 2003 2004 2005 2006 Vehicle manufacturers have reported to Government that they have achieved the 2006 recycling and recovery targets of 80 per cent and Annual totals of cars on UK roads 85 per cent respectively. Source: SMMT

While the number of cars on the roads increases, the average age of a car scrapped went down to 13.2 years in 2006. 3.4% 15.1% This is a positive trend which suggests earlier introduction of new cars, which tend to be more environmentally friendly. 4.6% 0.5% Older cars and vehicles will have lower air quality and higher CO2 emis- sions as a result of product development and the progression of “Euro” cy- cles.

Emissions from vehicles are a function of the profile of the vehicle “parc”, all vehicles being driven on the road. Development of a newer fleet should 76.5% improve safety and air quality as well as having climate change benefits.

Scrap steel Vehicles NoD destroyed Vehicles CoD (UK) destroyed Vehicles CoD (NI / Foreign) destroyed Unassisted Scrap - UK vehicle destroyed Scrap steel from motor vehicles is recycled into new product. Automotive Unidentified vehicles destroyed scrap is a major feedstock to the global steel industry. This reduces the energy needed to mine and process raw materials for new steel. CoD– Certificate of destruction. NoD– Notice of destruction (vehicles category M1 and N1). In lifecycle terms the energy saved in using scrap steel more than com- Unassisted scrap– Scrapped vehicles with partially correct vehicle identification number. pensates for the energy used in the end-of-life process. Source: DTI 36

7.0 Stakeholder engagement

37

7.0 Stakeholder engagement

During 2006 SMMT and its members continued its programme of continuous active stakeholder engage- ment at European, national and regional levels.

As interest in the issue of sustainability, and climate change in particular, increases SMMT looks to ad- dress these complex issues in an open and honest way, publishing data on the performance of the indus- try throughout the lifecycle of its products.

SMMT also feels responsibility to engage on the wider agenda, to take the sustainability debate to other sectors and organisations. MOTOR INDUSTRY FACTS - 2007 SMMT publishes and makes available information on  Biofuels  Industrial, economic and commercial activity  Greener driving guides  Sustainability

The SMMT aims to become a source of knowledge and information on sustainability and climate change DRIVE GREEN - DRIVE SAFELY issues.

The objective is to develop this programme during 2007 and 2008, to demonstrate the commitment of members to sustainable motoring and highlight where other stakeholders need to act.

38

8.0 Integrated approach

Technology

Behavioural Regulations changes

39

8.0 Integrated approach

Strategy to reduce carbon - Stern report

On 30 October 2006 Nicholas Stern published his report on the Economics of Climate Change, which was commissioned by the British government.

This review has assessed a wide range of evidence on the economic impact of climate change and its costs, and leads to a simple conclusion: the benefits of strong and early action far outweigh the economic cost of not acting. Stern identifies that there is a market failure in addressing the need to reduce carbon. The report highlighted three strategies to carbon reduction:

 Technology  Carbon price – including fiscal, trading and regulation  Removal of barriers to change consumer behaviour

Stern states all three strategies must be deployed to ensure timely and effective progress to carbon reduction.

SMMT has broken these down into 12 strategies to address carbon reduction from road transport, (see page 41—42) four of which automo- tive manufacturers’ have direct responsibility for, the rest are a combination of organisational and individual change and carbon pricing.

The UK automotive sector recognises and identifies the worth of this combined strategy for carbon reduction. In the following pages we identify key areas and stakeholders.

Increases in carbon from road transport

All stakeholders need to recognise that despite efforts to reduce carbon from road transport there will be factors that work against this strategy.

These include:  Legislation and quasi legislation for safety and air quality  Increasing number of vehicles on the road  Increase in the distance driven  Creating adverse planning environment where distance between home, work and leisure increase the demand for road transport  Consumer choice of vehicle

40

Low carbon road transport - technology

1. Power train technology 2. Fuel technology

Vehicle and component Fuel companies manufacturers Development of sustainable bio- To design, develop and market fuels to reduce the carbon content more efficient drivetrains, engines of fuels. and gearboxes.

3. Infrastructure technology 4. Vehicle technology

Highways Agency devolved admini- Vehicle and component manufac- strations turers

Maintain safe consistent traffic To design, develop and market flows, reduce congestion and im- tyres, lubricants and other CO2 re- prove journey times. duction technologies

Low carbon road transport – removing barriers to change

5. Smarter driving 6. New vehicle choice

Driving Standards Agency, employ- Vehicle manufacturers and retailers ers and individuals Promote and develop understand- Learning smarter, anticipatory driv- ing of the offering of lower carbon ing skills to reduce fuel consump- vehicles, through labelling for ex- tion. ample.

41

Low carbon road transport – removing barriers to change

7. Smarter working 8. Smarter choices

Employers and employees Department for Transport, de- volved administrations, local au- Reducing travelling by working thorities. from home or out of the office, telephone and video conferencing. Providing and encouraging high quality, frequent and affordable public transport. (11)

Low carbon road transport – carbon pricing

9. Regulation 10. Fiscal policy

European and UK government in Carbon pricing, fuel duty, Vehicle cooperation with vehicle manufac- Excise Duty, Company Car Tax, turers capital allowances, mileage allow- ances. Better regulation, long term, sus- Clear consistent long-term mes- tainable, affordable to all parties. sages.

11. Carbon trading 12. Demand management

European and UK government UK government and local authori- ties. Best value carbon schemes, sec- Schemes that reduce congestion, toral parity for carbon price. improve traffic flows and recognise new, low carbon technology with- out creating market distortion.

42

Road transport – carbon increases

A. Air quality emissions B. Need for increased safety

European and UK government European and UK government

Since 1990 there have been con- The need for increased safety, both tinuous improvements in vehicle inside the vehicle and external to technology. This sophisticated other road users, this impacts equipment complicates carbon re- aerodynamics and adds weight. duction engineering strategies.

C. Increased number of vehicles D. Planning – increasing the – increased congestion need to travel

European and UK government local UK and regional government authorities An increase in the number of vehi- Many factors increase the demand cles will increase congestion. Both for road transport. Economic, social increases will add to carbon emis- and planning cannot be excluded sions from road transport. from this. They can potentially counteract other strategies.

E. Consumer choice of vehicle (car, van, truck, bus and coach)

Vehicle manufacturers and con- sumers

For many reasons a move to larger, better appointed vehicle will in- crease new vehicle CO2, but not necessarily total CO2.

43

Appendices

Appendix Table 1. Sector fact sheet 1999 2000 2001 2002 2003 2004 2005 2006

Automotive manufacturing sector turnover (WI) (£ billion) 44.2 42.5 42.2 44.6 46.0 46.2 47.6 48.5 Share of total transport manufacturing turnover (UK 64.0 65.5 64.1 67.6 68.0 67.1 67.4 67.0 Totalturnover) net capitaliInvestment(%) (WI) (£ billion) 2.2 2.2 2.2 1.3 1.2 1.4 1.3 1.4 Automotive sector value added (WI) (£ billion) 9.0 7.8 9.0 8.8 8.5 8.9 8.8 9.0 Total employees directly dependent on the automotive 910,600 891,700 883,200 873,100 877,100 854,400 861,600 851,800 Valuesector of(WI) exports (WI) (£ billion) 19.3 19.8 18.0 20.9 21.9 22.5 23.7 24.5 Percentage of total UK export (%) 11.5 10.5 9.5 11.2 11.6 11.8 11.2 10.2 Sector value added share of UK GVA (%) 3.9 3.4 3.8 3.7 3.7 3.4 3.2 3.1 UK sector share of global passenger car production (%) 4.5 4.0 3.7 3.9 3.9 3.7 3.5 3.4 Number of UK volume passenger car manufacturers (WI) - 9 9 9 9 9 8 7 Number of UK commercial vehicle (CV) manufacturers - 10 10 9 9 9 9 9 Number(WI) of cars and CVs produced (million) 1.98 1.81 1.69 1.82 1.85 1.86 1.80 1.65 New car registrations (AC) (million) 2.19 2.22 2.45 2.56 2.58 2.57 2.44 2.34 Cars and light CVs on the road (million) 29.50 29.90 30.50 31.30 31.90 32.40 32.90 34.24

Appendix Table 2. Production and distribution inputs 1999 2000 2001 2002 2003 2004 2005 2006

Total combined energy use (GWh) (AS) 6,110 7,013 6,857 6,540 6,126 5,337 5,104 4,851 Energy use per employee (kWh) (AS) 64,175 70,108 71,166 74,685 69,912 69,923 70,559 64,007 Energy use per £1million turnover (kWh) (AS) 303,828 309,717 281,036 186,943 156,419 154,062 129,602 115,847 Energy use per vehicle produced (MWh/unit) (VMS) 3.1 3.9 4.3 4 2.8 2.5 2.3 2.5 Total combined water use ('000m3) (AS) - 9,620 10,105 9,108 8,404 7,037 7,127 6,779 Water use per employee (m3) (AS) - 96.2 104.9 101.8 95.9 92.2 98.5 89.4 Water use per £1million turnover (m3) (AS) - 457 414 255 215 203 181 162 Water use per vehicle produced (m3) (VMS) - 5.3 6.2 5.6 3.4 3.4 3.2 3.3

44

Appendix Table 3. Production and distribution material 1999 2000 2001 2002 2003 2004 2005 2006 outputs

Total combined CO2 equivalent (tonnes) (AS) 1,821,586 2,182,926 2,149,771 1,954,295 1,679,832 1,447,900 1,417,129 1,363,189

CO2 equivalent per employee (tonnes) (AS) 19.3 21.8 22.3 23.9 19.2 19.0 19.6 18.0

CO2 equivalent (tonnes) per £1million turnover (AS) 90.6 95.3 88.1 59.9 42.9 41.8 36.0 32.6

CO2 equivalent per vehicle produced (tonnes) (VMS) 1.1 1.1 1.3 1.2 0.7 0.7 0.6 0.7

Total combined emissions of VOC (kg) (AS) 4,018,951 7,136,682 6,926,340 6,240,100 7,336,780 5,479,870* 6,478,430 5,040,170 Emissions of VOC per employee (kg) (AS) 42.2 71.3 71.9 69.7 83.7 71.8 89.6 66.5 Emissions of VOC per £1million turnover (kg) (AS) 199.8 339.0 284.0 174.6 187.4 158.2 164.5 120.4 Emissions of VOC per vehicle produced (kg) (VMS) 2.9 4.4 4.6 4.2 4.1 3.5 3.5 2.9

Total combined waste to landfill (tonnes) (AS) 54,954 80,399 121,207 70,897 56,743 52,842 44,910 39,862 Waste to landfill per employee (tonnes)(AS) 0.6 0.8 1.3 0.8 0.6 0.7 0.6 0.5 Waste to landfill per £1million turnover (tonnes) (AS) 2.7 3.7 4.9 2.0 1.4 1.5 1.1 1.0 Waste to landfill per vehicle produced (kg) (VMS) - 40.3 66.4 40.5 17.9 19.8 14.5 17.0

Total combined site waste for recycling (tonnes) (AS) 145,797 197,752 207,832 Site waste for recycling per employee (kg) (AS) 1,910.2 2,733.8 2,742.2 Site waste for recycling per £1million turnover (kg) (AS) 4,208.7 5,021.4 4,963.3 Site waste for recycling per vehicle produced (kg) (VMS) 78.2 99.7 108.2

Total combined site waste for recovery (tonnes) (AS) 3,373 2,506 1,566 Site waste for recovery per employee (tonnes) (AS) 0.0 0.0 0.0 Site waste (tonnes) for recovery per £1million turnover 0.1 0.1 0.0 (tonnes)Site waste (AS) (kg) for recovery per vehicle produced (VMS) 2.2 1.5 0.9 * Large vehicle manufacturer excluded from 2004 data

45

Appendix Table 4. Economic indicators 1999 2000 2001 2002 2003 2004 2005 2006

UK automotive manufacturing sector turnover (£ billion) (WI) 44.2 42.5 42.6 44.6 46.0 46.2 47.6 48.5 Signatories combined turnover (£ billion) (AS) 20.1 21.0 24.4 35.7 39.2 34.6 39.4 41.9 Total UK number of new cars produced (AC) 1,799,004 1,641,452 1,492,365 1,629,744 1,657,558 1,646,750 1,595,697 1,442,085 Total UK number of new CVs produced 185,905 172,442 192,872 191,267 188,871 209,293 206,753 207,704

Total UK number of new vehicles produced 1,984,909 1,813,894 1,685,237 1,821,011 1,846,429 1,856,043 1,802,450 1,649,789

Total number of new vehicles produced by signatories 1,572,642 1,470,659 1,441,794 1,731,894 1,614,981 1,769,810 1,897,921 Total number of new car registrations (AC) 2,197,615 2,221,647 2,458,769 2,563,631 2,579,050 2,567,269 2,439,717 2,344,864 Total number of new CV registrations 288,100 298,043 313,411 322,258 363,687 389,923 385,969 386,968

Total number of new vehicle registrations 2,485,715 2,519,690 2,772,180 2,885,889 2,942,737 2,957,192 2,825,686 2,731,832

Appendix Table 5. Employment indicators 1999 2000 2001 2002 2003 2004 2005 2006 Number of jobs dependent on the sector 910,600 891,700 883,200 873,100 877,100 854,400 861,600 851,800 · Automotive manufacturing 260,600 251,700 238,200 235,100 224,100 212,400 200,600 190,800 · Automotive supply and use 650,000 640,000 645,000 638,000 653,000 642,000 661,000 661,000 Signatories total combined employees (AS) 95,214 100,036 96,357 89,455 87,625 76,327 72,337 75,789

Data in the report is quoted in a number of ways:

Whole industry data (WI) All car sales in the United Kingdom (AC) SMMT members data (SMMT) All signatories (AS) Vehicle manufacturing signatories (VMS)

46

References

(1) Sustainable resource use in the motor industry: a mass balance approach. Elghali, McColl-Grubb, Schiavi and Griffiths TRL 2004

(2) Life cycle inventory for the Golf A4. Schweimer and Levin (2000)

(3) Life Cycle Assessment of Lightweight and End-of-Life Scenarios for Generic Compact Class Passenger Vehicles. Wulf-Peter Schmidt, Elisabeth Dahlqvist, Matthias Finkbeiner, Stephan Krinke, Silvia Lazzari, Dirk Oschmann, Sophie Pichon and Christian Thiel (2004)

(4) Stern Review of the Economics of Climate Change (2006)

(5) http://environment-agency.gov.uk/ourviews/857198/1498962/?lang=e

(6) LCVP Label, Research Programme 2007– ESA Market Research

(7) www.dft.gov.uk/pgr/roads/environment/rtfo/aboutrtfo

(8) ACEA, Improving Air Quality: a key interest

(9) Defra, The air quality strategy for England, Scotland, Wales and Northern Ireland

(10) Department for Transport, Transport Statistics Great Britain

(11) www.dft.gov.uk/pgr/sustainable/smarterchoices/

(12) HM Government- Securing the future– delivering UK sustainable development strategy

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Contact information

Organisation Website Organisation Website

Sector Skills Council for the Auto Industry www.autoindustry.co.uk Automotive Sector www.automotive-skills.org.uk

The National Skills Academy www.manufacturing.nsacademy.co.uk SMMT www.smmt.co.uk

Department for Food Environment Sustainable Development and Rural Affairs www.defra.gov.uk/environment/sustainable Research Network www.sd-research.org.uk

Department for Transport (DfT) www.dft.gov.uk The Carbon Trust www.thecarbontrust.co.uk

Department for Business, The Sustainable Development Enterprise and Regulatory Reform www.berr.gov.uk/ Commission www.sd-commission.org.uk The World Business Council for EC Sustainable Development www.europa.eu.int/comm/sustainable Sustainable Development www.wbcsd.org UK Climate Change Impact Energy Savings Trust www.transportenergy.org.uk Programme www.ukcip.org.uk UK Commission for Integrated Environment Agency www.environment-agency.gov.uk Transport www.cfit.gov.uk

European Environment Agency www.eea.eu.int UK GOV SITE www.sustainable-development.gov.uk

UN Division for Sustainable Foresight Vehicle Programme www.foresightvehicle.org.uk Development www.un.org/esa/sustdev United Kingdom Petroleum LowCVP www.lowcvp.org.uk Industries Association www.ukpia.com Royal Society for the Prevention of Vehicle Certification Agency www.vca.gov.uk Accidents www.rospa.org.uk Published by: The Society of Motor Manufacturers and Traders Limited., September 2006. SMMT and the SMMT Logo are registered trademarks of SMMT Ltd. © All rights reserved

Printed on chlorine-free paper, manufactured from pulp sourced from sustainable sources. Images from www.freefoto.com, www.dreamtime.com

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Signatory Website

Bentley Motors www.bentleymotors.com

BMW Group www.bmw.co.uk and www.mini.co.uk

Daimler Chrysler www.daimlerchrysler.com

Ford Motor Company www.ford.com

GKN Driveline www.gknplc.com

Honda UK Manufacturing www.mfg.honda.co.uk

Jaguar Cars www.jaguar.com

Land Rover UK www.landrover.com

Nissan www.nissan.co.uk and www.nissan-global.com

Perkins Engines www.caterpillar.com PSA Peugeot Citroën www.sustainability.psa-peugeot-citroen.com Automobiles Toyota www.toyotauk.com and www.toyota.co.jp

Vauxhall Motors www.vauxhall.co.uk

Volvo Car UK www.volvocars.co.uk

Volkswagen Group www.volkswagen-environment.de

Look for links to 'about us' or 'company' to be directed to sustainability and environmental information.

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The Society of Motor Manufacturers and Traders Forbes House, Halkin Street, London, SW1X 7DS UK Telephone: +44 (0)20 7344 9200 E-mail: [email protected] Website: www.smmt.co.uk/sustainability

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